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Tax relief for residential landlords

21/01/2019 08:08:29
Hi, I have two questions.
1) I have income from lodgers living in my home: total income from them in 2017-18 was £13,355. Their proportion of rates, insurance and utilities totals £6,435 so net income would be £6,920. Am I right that - this year - I am better to use the Rent-a-Room tax exemption rather than normal actual profit?
2) This year I replaced the central heating boiler - cost £7,400. Even with my other income (primarily state pension), that is more than the rest of my taxable income minus tax free allowance (this year, £2740) . Is it an allowable expense / can I carry remainder forward or claim back previous tax paid etc etc?
Many thanks
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Re:Tax relief for residential landlords

21/01/2019 13:31:15
Hi,

Thank you for your question.

Due to the fact that your gross rents for 2017-18 were £13355 then you can choose how you want to work out your tax for the 2017-18 tax year. You can either pay tax on your actual profit (total receipts less any expenses and capital allowances ) or you can pay tax on your gross receipts over the Rent-a- Room allowance (£7500).

However, please note that you cannot deduct any expenses or capital allowances if you choose the second method. Please note that you will also be required to let HMRC know within one year from 31 January following the end of the the relevant tax year if you want to start or stop using the second method.

In your case if you have replaced your central heating boiler with a more modern like for like boiler (more energy efficient etc) then you can claim the £7400 as a repair and therefore as an expense against your rental income. You would therefore need to use the first method in order to create a loss which can then only be carried forward to set against any future rental profits for 2018-19 et seq.

I hope this helps.
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Tax relief for residential landlords

26/03/2019 08:27:33
I only own 10% of rental properties, do I still enter 50% of loan interest & 50% at basic rate for 18/19 tax year please
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Tax relief for residential landlords

26/03/2019 09:22:53
I am a non taxpayer as the rental income I receive is below my Personal allowance how will these tax changes affect me please

This message was edited 1 time. Last update was at 26/03/2019 09:35:11

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Re:Tax relief for residential landlords

26/03/2019 12:09:19
This is in response to the question posted by Anonymous dated 26/03/2019 08:27:33

Hi,

Thank you for your question.

You are correct in stating that for the 2018-19 income tax year you should enter 50% of the loan interest claimed in the first relevant box on the tax return (box number unknown at present) and the remaining 50% in the second relevant box on the tax return.

The actual amount of loan interest that you claim should be the amount applicable to your 10% share of any rental income from the rental properties.


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Tax relief for residential landlords

26/03/2019 12:17:04
what happens if I put my rental property up for sale but after 3/6 months it hasn't sold & I decide to re let it,thank you
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Re:Tax relief for residential landlords

26/03/2019 13:52:59
Hi,

This is a response to Jill62 question on 26/03/2019 at 09:22

If your total income including, employment, pensions, property income and other sources remains below your personal allowance then you will remain a non-taxpayer, therefore no further action is necessary. However, if all your income exceeds your personal allowances then tax will be due. If that is the case please contact us on 0300 200 3310 so that we can discuss your tax affairs on a personal note and answer any questions you may have.

I hope this helps.



Would you be interested in helping us improve the Forum? We are looking for volunteers to spend some time speaking with our research team. If you think you could help us, please click the link below for more information and to register your interest:

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We look forward to hearing from you.

This message was edited 2 times. Last update was at 26/03/2019 13:56:31

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Re:Tax relief for residential landlords

27/03/2019 12:55:33
Hi Jill62,

Thank you for your further question.

There is no particular change concerning the rental property. To the date you ceased to let the property you are entitled to claim the expenditure incurred during that letting period.

When you removed the property from the letting market no expenditure during this period to re-letting the property is allowable. When you start again to let the property the same rules apply to when you first rented the property.

Please see the guidance links below:

Tax relief for residential landlords: how it's worked out

Income Tax when you let property: work out your rental income

Property Income Manual (PIM)
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Tax relief for residential landlords

28/03/2019 09:10:04
MANY THANKS FOR ALL YOUR HELP TO DATE
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Tax relief for residential landlords

02/05/2019 12:32:47
I understand that for the Latest tax Return I put 50% of annual mortgage interest sum in Box 26 and the remaining 50% in Box 44.

However, as my total income from my one rental property is way less than 85000 gbp, the notes direct me to combine ALL the Property Expenses into one sum which should go in Box 29.

Do I still split mortgage interest between Boxes 26 & 44 and lump the remaining property expenses in Box 29?

Thankyou.
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Re:Tax relief for residential landlords

03/05/2019 07:04:01
Hi,

Thanks for your question.

You need to split the mortgage interest between boxes 26 and 44. All other expenses may go into box 29.

I hope this helps.
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Tax relief for residential landlords

28/05/2019 07:20:06
Hi,

I've been an overseas landlord for 6.5 years. If I sell or dispose my property next week at £123K and I make a loss of £4K because I bought it at £127K 14 years ago, when should I declare it and how, and is there any tax payable?

Also, what should I do with my tax return account for the next financial year because I'll be having no income at all in the UK as I'm working overseas?

Please advise. Thanks.
L
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Re:Tax relief for residential landlords

28/05/2019 11:06:26
Hi

Thank you for your question.

However, as a non-resident, when you sell your property, you would need to report the disposal to us within 30 days from the date of conveyance using the online non-resident Capital Gains Tax return even if there is no Capital gains Tax to pay.

Please see the following link for details;

CG Tax for non residents

This message was edited 1 time. Last update was at 28/05/2019 13:23:13

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Tax relief for residential landlords

28/05/2019 13:19:19
Many thanks for your kind response. By the way, is there a forum for Capital Gains Tax which you could kindly give me the link? The calculations seem very confusing, it doesn't even ask what price I actually sold the property for.
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Re:Tax relief for residential landlords

28/05/2019 13:21:59
Hi,

Please post any question you have regarding the Capital Gains calculation and we will help you.

Thank you
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Tax relief for residential landlords

28/05/2019 13:59:51
I've been a non-resident landlord for 6.5 years from Aug 12 until Jan 19 and I used to reside there from Nov 05 to Aug 12. If I sell or dispose my property next week at £123K although the current value is £130K, I'll make a loss of £4K because I bought it at £127K nearly 14 years ago around Nov 05 but the value dropped to around £90K in 2015. So is there any capital gains tax payable and the 30 days to report is starting from the day I transfer the ownership?

Also, what should I do with my tax return account for the next financial year because I'll be having no income at all in the UK as I'm working overseas?

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